[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2551 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2551

   To amend title 18, United States Code, to require Federal Prison 
  Industries to compete for its Federal contracts to minimize unfair 
 competition with private firms (depriving law-abiding workers of job 
    opportunities), to save taxpayer dollars by empowering Federal 
  contracting officers to be able to acquire commercial products that 
  better meet agencies' needs, more quickly and at less cost without 
having to obtain permission from Federal Prison Industries, to further 
  empower contracting officers to compel Federal Prison Industries to 
fully perform its contract obligations to the same extent as all other 
                  contractors, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 19, 1999

  Mr. Hoekstra (for himself, Mr. Frank of Massachusetts, Mr. Collins, 
Mrs. Maloney of New York, Mr. Hilleary, Mr. Coble, Mr. Kennedy of Rhode 
 Island, Mr. Sensenbrenner, Mr. Clay, Mr. Cunningham, Mr. Conyers, Mr. 
 Chambliss, Mr. Roemer, Mr. Smith of Texas, Mr. Frost, Mr. Ballenger, 
   Mr. Edwards, Mr. Gilman, Mr. Stump, Mr. Barcia, Mr. McIntosh, Mr. 
Doyle, Mr. Souder, Ms. Stabenow, Mr. Ehlers, Mr. Weygand, Mr. Manzullo, 
 Mr. Berry, Mrs. Cubin, Mr. Filner, Mr. Upton, Ms. Woolsey, Mr. Camp, 
    Mr. Klink, Mr. Ewing, Mr. Deal of Georgia, Mr. Knollenberg, Mr. 
 Nethercutt, Mr. Norwood, Mr. McKeon, Mr. Schaffer, Mr. Tancredo, Mr. 
Ney, Mr. Royce, Mrs. Myrick, Mr. Bartlett of Maryland, Mr. Coburn, Mr. 
   Linder, Mr. Shadegg, Mr. Sam Johnson of Texas, Mr. Kingston, Mr. 
 Hostettler, Mr. Terry, and Mr. Duncan) introduced the following bill; 
          which was referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
   To amend title 18, United States Code, to require Federal Prison 
  Industries to compete for its Federal contracts to minimize unfair 
 competition with private firms (depriving law-abiding workers of job 
    opportunities), to save taxpayer dollars by empowering Federal 
  contracting officers to be able to acquire commercial products that 
  better meet agencies' needs, more quickly and at less cost without 
having to obtain permission from Federal Prison Industries, to further 
  empower contracting officers to compel Federal Prison Industries to 
fully perform its contract obligations to the same extent as all other 
                  contractors, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Prison Industries 
Competition in Contracting Act of 1999''.

SEC. 2. GOVERNMENTWIDE PROCUREMENT POLICY RELATING TO PURCHASES FROM 
              FEDERAL PRISON INDUSTRIES.

    Section 4124 of title 18, United States Code, is amended to read as 
follows:
``Sec. 4124. Governmentwide procurement policy relating to purchases 
              from Federal Prison Industries
    ``(a) In General.--Purchases from Federal Prison Industries, 
Incorporated, a wholly owned Government corporation, as defined in 
section 9101(3)(E) of title 31, may be made by a Federal department or 
agency only in accordance with this section.
    ``(b) Solicitation and Evaluation of Offers and Contract Awards.--
(1) When a procurement activity of a Federal department or agency has a 
requirement for a specific product or service that is authorized to be 
offered for sale by Federal Prison Industries, in accordance with 
section 4122 of this title, and is listed in the catalog referred to in 
subsection (g), the procurement activity shall solicit an offer from 
Federal Prison Industries, if the purchase is expected to be in excess 
of the micro-purchase threshold (as defined by section 32(f) of the 
Office of Federal Procurement Policy Act (41 U.S.C. 428(f))).
    ``(2) A contract award for such product or service shall be made 
using competitive procedures in accordance with the specifications and 
evaluation factors specified in the solicitation (or other request for 
offers), unless a determination is made by the Attorney General 
pursuant to paragraph (3).
    ``(3) The procurement activity shall negotiate with Federal Prison 
Industries on a noncompetitive basis for the award of a contract if the 
Attorney General determines that--
            ``(A) Federal Prison Industries cannot reasonably expect to 
        receive the contract award on a competitive basis; and
            ``(B) the contract award is necessary to maintain work 
        opportunities otherwise unavailable at the penal or 
        correctional facility at which the contract is to be performed 
        to prevent circumstances that could reasonably be expected to 
        significantly endanger the safe and effective administration of 
        such facility.
    ``(4) A contract award shall be made with Federal Prison Industries 
if the contracting officer for the procurement activity determines 
that--
            ``(A) the prison-made product or service to be furnished 
        will meet the requirements of the procurement activity 
        (including any applicable prequalification requirements and all 
        specified commercial or governmental standards pertaining to 
        quality, testing, safety, serviceability, and warranties);
            ``(B) timely performance of the contract can be reasonably 
        expected; and
            ``(C) the contract price does not exceed a current market 
        price.
    ``(5) A determination by the Attorney General pursuant to paragraph 
(3) shall be--
            ``(A) supported by specific findings by the warden of the 
        penal or correctional institution at which a Federal Prison 
        Industries workshop is scheduled to perform the contract;
            ``(B) supported by specific findings by Federal Prison 
        Industries regarding why it does not expect to win the contract 
        on a competitive basis; and
            ``(C) made and reported in the same manner as a 
        determination made pursuant to section 303(c)(7) of the Federal 
Property and Administrative Services Act of 1949 (41 U.S.C. 253(c)(7)).
    ``(6) If the Attorney General has not made the determination 
described in paragraph (3) within 30 days after Federal Prison 
Industries has been informed of a contracting opportunity by a 
procurement activity, the procurement activity shall conduct a 
procurement for the product in accordance with the procedures generally 
applicable to such procurements by the procurement activity.
    ``(c) Competitive Offers From Federal Prison Industries.--A timely 
offer made by Federal Prison Industries shall be considered for award 
in accordance with the applicable specification and evaluation factors 
specified in any solicitation (or other request for offers).
    ``(d) Performance by Federal Prison Industries.--Federal Prison 
Industries shall perform its contractual obligations under a contract 
awarded by a Federal department or agency to the same extent as any 
other contractor.
    ``(e) Finality of Contracting Officer's Decision.--(1) A decision 
by a contracting officer regarding the award of a contract to Federal 
Prison Industries or relating to the performance of such contract shall 
be final, unless reversed on appeal pursuant to paragraph (2) or (3).
    ``(2) The Chief Executive Officer of Federal Prison Industries may 
appeal to the head of a Federal department or agency a decision by a 
contracting officer not to award a contract to Federal Prison 
Industries pursuant to subsection (b)(4). The decision of the head of a 
Federal department or agency on appeal shall be final.
    ``(3) A dispute between Federal Prison Industries and a procurement 
activity regarding performance of a contract shall be subject to--
            ``(A) alternative means of dispute resolution pursuant to 
        subchapter IV of title 5; or
            ``(B) final resolution by the board of contract appeals 
        having jurisdiction over the procurement activity's contract 
        performance disputes pursuant to the Contract Disputes Act of 
        1978 (41 U.S.C. 601 et seq.).
    ``(f) Reporting of Purchases.--Each Federal department or agency 
shall report purchases from Federal Prison Industries to the Federal 
Procurement Data System (as referred to in section 6(d)(4) of the 
Office of Federal Procurement Policy Act (41 U.S.C. 405(d)(4))) in the 
same manner as it reports to such System any acquisition in an amount 
in excess of the simplified acquisition threshold (as defined by 
section 4(11) of the Office of Federal Procurement Policy Act (41 
U.S.C. 403(11))).
    ``(g) Catalog of Products.--Federal Prison Industries shall publish 
and maintain a catalog of all specific products and services that it is 
authorized to offer for sale. Such catalog shall be periodically 
revised as products and services are added or deleted by its board of 
directors (in accordance with section 4122(b) of this title).''.

SEC. 3. PUBLIC PARTICIPATION REGARDING EXPANSION PROPOSALS BY FEDERAL 
              PRISON INDUSTRIES.

    Section 4122(b) of title 18, United States Code, is amended--
            (1) by redesignating paragraph (6) as paragraph (10); and
            (2) by striking paragraphs (4) and (5) and inserting the 
        following paragraphs:
    ``(4) A decision to authorize Federal Prison Industries to offer a 
new specific product or service or to expand the production of an 
existing product or service shall be made by its board of directors in 
conformance with the requirements of subsections (b), (c), (d), and (e) 
of section 553 of title 5, and this chapter.
    ``(5)(A) Whenever Federal Prison Industries proposes to offer for 
sale a new specific product or service or to expand production of a 
currently authorized product or service, the Chief Operating Officer of 
Federal Prison Industries shall submit an appropriate proposal to the 
board of directors and obtain the board's approval before initiating 
any such expansion. The proposal submitted to the board shall include a 
detailed analysis of the probable impact of the proposed expansion of 
inmate-work activities by Federal Prison Industries on private sector 
firms and their noninmate workers.
    ``(B)(i) The analysis required by subparagraph (A) shall be 
performed by an interagency team on a reimbursable basis or by a 
private contractor paid by Federal Prison Industries.
    ``(ii) If the analysis is to be performed by an interagency team, 
such team shall be led by the Federal Procurement Data Center with 
representatives of the Department of Labor, the Department of Commerce, 
and the Small Business Administration.
    ``(iii) If the analysis is to be performed by a private contractor, 
the selection of the contractor and the administration of the contract 
shall be conducted by one of the entities references in clause (ii) as 
an independent executive agent for the board of directors.
    ``(C) The analysis required by subparagraph (A) shall identify and 
consider--
            ``(i) the number of vendors that currently meet the 
        requirements of the Federal Government for the specific product 
        or service;
            ``(ii) the proportion of the Federal Government market for 
        the specific product or service currently furnished by small 
        businesses during the previous 3 fiscal years;
            ``(iii) the share of the Federal market for the specific 
        product or service projected for Federal Prison Industries for 
        the fiscal year in which production or performance will 
        commence or expand and the subsequent 3 fiscal years;
            ``(iv) whether the industry producing the specific product 
        or service in the private sector--
                    ``(I) has an unemployment rate higher than the 
                national average;
                    ``(II) has a rate of employment for workers that 
                has consistently shown an increase during the previous 
                5 years; or
                    ``(III) has an import to domestic production ratio 
                of 25 percent or greater;
            ``(v) the total volume of domestic production during each 
        of the 5 previous years in the industry producing the specific 
        product or service in the private sector;
            ``(vi) whether the specific product is an import-sensitive 
        product;
            ``(vii) the requirements of the Federal Government and the 
        demands of entities other than the Federal Government for the 
        specific product or service during the previous 3 fiscal years;
            ``(viii) the projected growth or decline in the demand of 
        the Federal Government for the specific product or service;
            ``(ix) the capability of the projected demand of the 
        Federal Government for the specific product or service to 
        sustain both Federal Prison Industries and private vendors; and
            ``(x) whether authorizing the production of the new product 
        or performance of a new service will provide inmates with the 
        maximum opportunity to acquire knowledge and skill in trades 
        and occupations that will provide them with a means of earning 
        a livelihood upon release.
    ``(C)(i) The board of directors may not approve a proposal to 
authorize the production and sale of a new specific product or 
continued sales of a previously authorized product unless--
            ``(I) the product to be furnished is a prison-made product; 
        or
            ``(II) the service to be furnished is to be performed by 
        inmate workers.
    ``(ii) The board of directors may not approve a proposal to 
authorize the production and sale of a new prison-made product or to 
expand production of a currently authorized product if the product is--
            ``(I) produced in the private sector by an industry which 
        has reflected during the previous year an unemployment rate 
        above the national average; or
            ``(II) an import-sensitive product.
    ``(iii) The board of directors may not approve a proposal for 
inmates to provide a service in which an inmate worker has access to--
            ``(I) personal or financial information about individual 
        private citizens, including information relating to such 
        person's real property, however described, without giving prior 
        notice to such persons; or
            ``(II) data that is classified, or that will become 
        classified after being merged with other data.
    ``(iv)(I) Federal Prison Industries is prohibited from furnishing 
construction services relating to buildings, structures, or other real 
property.
    ``(II) For purposes of this clause, the term `construction' has the 
meaning given such term by section 36.102 of the Federal Acquisition 
Regulation (48 CFR part 36.102), as in effect on January 1, 1999, 
including the repair, alteration, or maintenance of real property in 
being.
    ``(6) To provide further opportunities for participation by 
interested parties, the board of directors shall--
            ``(A) give additional notice of a proposal to authorize the 
        production and sale of a new product or expand the production 
        of a currently authorized product in a publication designed to 
        most effectively provide notice to private vendors and labor 
        unions representing private sector workers who could reasonably 
        be expected to be affected by approval of the proposal, which 
        notice shall offer to furnish copies of the analysis required 
        by paragraph (5) and shall solicit comment on the analysis;
            ``(B) solicit comments on the analysis required by 
        paragraph (5) from trade associations representing vendors and 
        labor unions representing private sector workers who could 
        reasonably be expected to be affected by approval of the 
        proposal to authorize the production and sale of a new product 
        or expand the production of a currently authorized product; and
            ``(C) afford an opportunity, on request, for a 
        representative of an established trade association, labor 
        union, or other representatives of private industry to present 
        comments on the proposal directly to the board of directors.
    ``(7) The board of directors shall be provided copies of all 
comments received on the expansion proposal.
    ``(8) Based on the comments received on the initial expansion 
proposal, the Chief Operating Officer of Federal Prison Industries may 
provide the board of directors a revised expansion proposal. If such 
revised proposal provides for expansion of inmate work opportunities in 
an industry different from that initially proposed, such revised 
proposal shall be subject to the public comment requirements of 
paragraph (6).
    ``(9) The board of directors shall consider a proposal to authorize 
the sale of a new product or service (or to modify the volume of sales 
for a currently authorized product or service) and take any action with 
respect to such proposal, during a meeting that is open to the public, 
unless closed pursuant to section 5526 of title 5.
    ``(10) In conformity with the requirements of paragraphs (5) 
through (9) of this subsection, the board of directors may--
            ``(A) authorize the donation of products produced by 
        Federal industries and available for sale; or
            ``(B) authorize the production of a new specific product 
        for donation.''.

SEC. 4. SALES TO PRIVATE SECTOR FIRMS.

    (a) In General.--In accordance with subsections (a) and (b) of 
section 1761 of title 18, United States Code, Federal Prison Industries 
is prohibited from offering products or services as a subcontractor or 
supplier to a private for-profit business concern, notwithstanding that 
the product or service being furnished by such concern will ultimately 
be supplied to the United States Government, the government of the 
District of Columbia, an agency of a State government or any political 
subdivision of a State government, or an eligible not-for-profit 
organization.
    (b) Clarifying Amendment.--Section 1761 of title 18, United States 
Code, is amended--
            (1) in subsection (a), by striking ``any goods, wares, or 
        merchandise manufactured, produced, mined'' and inserting 
        ``products manufactured, services furnished, or minerals 
        mined'';
            (2) in subsection (a), by striking ``any goods, wares, or 
        merchandise manufactured, produced, mined'' and inserting 
        ``products manufactured, services furnished, or minerals 
        mined''.

SEC. 5. DEDUCTIONS FOR VICTIM RESTITUTION AND OTHER PURPOSES.

    Section 4126 of title 18, United States Code, is amended--
            (1) by redesignating subsections (d), (e), and (f) as 
        subsections (e), (f), and (g); and
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d) Wages earned by an inmate worker of Federal Prison Industries 
shall be paid in the name of the inmate worker. Deductions, aggregating 
to not more than 80 percent of gross wages, shall be taken from the 
wages due for--
            ``(1) applicable taxes (Federal, State, and local);
            ``(2) payment of fines and restitution pursuant to court 
        order;
            ``(3) payment of additional restitution for victims of the 
        inmate's crimes (at a rate not less than 10 percent of gross 
        wages);
            ``(4) allocations for support of the inmate's family 
        pursuant to statute, court order, or agreement with the inmate;
            ``(5) allocations to a fund in the inmate's name to 
        facilitate such inmate's assimilation into society, payable at 
        the conclusion of incarceration; and
            ``(6) such other deductions as may be specified by the 
        Director of the Bureau of Prisons.''.

SEC. 6. ALLOCATION OF PROFITS TO VOCATIONAL TRAINING.

    (a) Section 4126 of title 18, United States Code (as amended by 
section 5) is further amended by adding at the end the following new 
subsection:
    ``(h) Not less than 20 percent of the gross profits of the 
corporation at the end of each fiscal year shall be allocated to fund 
vocational training for inmates without regard to the type of work 
activities to which they are assigned.''.

SEC. 7. FEDERAL PRISON INDUSTRIES REPORT TO CONGRESS.

    Section 4127 of title 18, United States Code, is amended to read as 
follows:
``Sec.  4127. Federal Prison Industries report to Congress
    ``(a) In General.--Pursuant to chapter 91 of title 31, the board of 
directors of Federal Prison Industries shall submit an annual report to 
Congress on the conduct of the business of the corporation during each 
fiscal year and the condition of its funds during the fiscal year.
    ``(b) Contents of Report.--In addition to the matters required by 
section 9106 of title 31, and such other matters as the board considers 
appropriate, a report under subsection (a) shall include--
            ``(1) a statement of the amount of obligations issued under 
        section 4129(a)(1) of this title during the fiscal year;
            ``(2) an estimate of the amount of obligations that will be 
        issued in the following fiscal year;
            ``(3) an analysis of--
                    ``(A) the corporation's total sales for each 
                specific product and type of service sold to the 
                Federal agencies and the commercial market;
                    ``(B) the total purchases by each Federal agency of 
                each specific product and type of service;
                    ``(C) the corporation's share of such total Federal 
                Government purchases by specific product and type of 
                service; and
                    ``(D) the number and disposition of disputes 
                submitted to the heads of the Federal departments and 
                agencies pursuant to section 4124(e) of this title;
            ``(4) an analysis of the inmate workforce that includes--
                    ``(A) the number of inmates employed;
                    ``(B) the number of inmates utilized to produce 
                products or furnish services sold in the commercial 
                market;
                    ``(C) the number and percentage of employed inmates 
                by the term of their incarceration; and
                    ``(D) the various hourly wages paid to inmates 
                employed with respect to the production of the various 
                specific products and types of services authorized for 
                production and sale to Federal agencies and in the 
                commercial market; and
            ``(5) data concerning employment obtained by former inmates 
        upon release to determine whether the employment provided by 
        Federal Prison Industries during incarceration provided such 
        inmates with knowledge and skill in a trade or occupation that 
        enabled such former inmate to earn a livelihood upon release.
    ``(c) Public Availability.--Copies of an annual report under 
subsection (a) shall be made available to the public at a price not 
exceeding the cost of printing the report.''.

SEC. 8. DEFINITIONS.

    Chapter 307 of title 18, United States Code, is amended by adding 
at the end the following new section:
``Sec.  4130. Definitions
    ``As used in this chapter--
            ``(1) the term `assembly' means the process of uniting or 
        combining articles or components (including ancillary finished 
        components or assemblies) so as to produce a significant change 
        in form or utility, without necessarily changing or altering 
        the component parts;
            ``(2) the term `current market price' means, with respect 
        to a specific product, the fair market price of the product 
        within the meaning of section 15(a) of the Small Business Act 
        (15 U.S.C. 644(a)), at the time that the contract is to be 
        awarded, verified through appropriate price analysis or cost 
        analysis, including any costs relating to transportation or the 
        furnishing of any ancillary services;
            ``(3) the term `import-sensitive product' means a product 
        which, according to Department of Commerce data, has 
        experienced competition from imports at an import to domestic 
        production ratio of 25 percent or greater;
            ``(4) the term `labor-intensive manufacture' means a 
        manufacturing activity in the private sector in which the ratio 
        of the value of direct labor to the value of the product prior 
        to shipment exceeds 20 percent;
            ``(5) the term `manufacture' means the process of 
        fabricating from raw or prepared materials, so as to impart to 
        those materials new forms, qualities, properties, and 
        combinations;
            ``(6) the term `prison-made products' means specific 
        products that require labor-intensive manufacture or assembly 
        employing Federal prison inmates for not less than 75 percent 
        of the hours of direct labor required for the production of the 
        product;
            ``(7) the term `reasonable share of the market' means a 
        share of the total purchases by the Federal departments and 
        agencies, as reported to the Federal Procurement Data System 
        for--
                    ``(A) any specific product during the 3 preceding 
                fiscal years, that does not exceed 20 percent of the 
                Federal market for the specific product; and
                    ``(B) any specific service during the 3 preceding 
                fiscal years, that does not exceed 5 percent of the 
                Federal market for the specific service;
            ``(8) the term `services' has the meaning given the term 
        `service contract' by section 37.101 of the Federal Acquisition 
        Regulation (48 CFR part 36.102), as in effect on July 1, 1997;
            ``(9) the term `specific product' means a product that is 
        designed and manufactured to meet requirements distinct in 
        function and predominant material of manufacture from another 
        product, as described by--
                    ``(A) the 6-digit classification for the product in 
                the 1997 North American Industry Classification System 
                (or any revisions to such system) published by the 
                Office of Management and Budget; and
                    ``(B) for purposes of reporting on sales by Federal 
                Prison Industries, the current National Stock Number 
                assigned to such product under the Federal Stock 
                Classification System (including group, part number and 
                section), as determined by the General Services 
                Administration; and
            ``(10) the term `specific service' means a type of service 
        included within one of the categories of services used by 
        Federal agencies in reporting to the Federal Procurement Data 
        System, as described in the current edition of the Product and 
        Service Code Manual issued by the Federal Procurement Data 
        Center of the General Services Administration as Executive 
        Agent for the Administrator for Federal Procurement Policy (as 
        referred to in section 6(d)(4) of the Office of Federal 
        Procurement Policy Act (41 U.S.C. 405(d)(4))).''.

SEC. 9. IMPLEMENTATION IN THE FEDERAL ACQUISITION REGULATION.

    (a) Proposed Revisions.--Proposed revisions to the Governmentwide 
Federal Acquisition Regulation to implement the amendments made by this 
Act shall be published not later than 60 days after the date of the 
enactment of this Act and provide not less than 60 days for public 
comment.
    (b) Final Regulations.--Final regulations shall be published not 
later than 180 days after the date of the enactment of this Act and 
shall be effective on the date that is 30 days after the date of 
publication.
    (c) Public Participation.--The proposed regulations required by 
subsection (a) and the final regulations required by subsection (b) 
shall afford an opportunity for public participation in accordance with 
section 22 of the Office of Federal Procurement Policy Act (41 U.S.C. 
418b).

SEC. 10. RULE OF CONSTRUCTION.

    Subsection (e) of section 4124 of title 18, United States Code, as 
amended by section 2, is not intended to alter any rights of any 
offeror other than Federal Prison Industries to file a bid protest in 
accordance with other law or regulation in effect on the date of the 
enactment of this Act.

SEC. 11. EFFECTIVE DATE AND APPLICABILITY.

    (a) Effective Date.--Except as provided in subsection (b), this Act 
and the amendments made by this Act shall take effect on the date of 
enactment of this Act.
    (b) Applicability.--Section 4124 of title 18, United States Code, 
as amended by section 2, shall apply to any requirement for a product 
or service offered by Federal Prison Industries needed by a Federal 
department or agency after the effective date of the final regulations 
issued pursuant to section 6(b), or after September 30, 2000, whichever 
is earlier.

SEC. 12. CLERICAL AMENDMENTS.

    The table of sections for chapter 307 of title 18, United States 
Code, is amended--
            (1) by amending the item relating to section 4124 to read 
        as follows:

``4124. Governmentwide procurement policy relating to purchases from 
                            Federal Prison Industries.'';
            (2) by amending the item relating to section 4127 to read 
        as follows:

``4127. Federal Prison Industries report to Congress.'';
        and
            (3) by adding at the end the following new item:

``4130. Definitions.''.
                                 <all>